Struggling to Reclaim Recent Highs Despite Debt Talk Optimism

Bitcoin (BTC) Prices, Charts, and Analysis:

• Bitcoin edges higher but price action lacks conviction.
• US debt ceiling talks may provide the next driver.

US President Joe Biden is ‘confident that we’ll get an agreement on the budget’ after talks yesterday with House Speaker Kevin McCarthy on the looming debt ceiling and possible US debt default. Republican McCarthy added to the positive tone of the meeting saying that ‘we’ve already taken default off the table’ and that the ‘structure of how we negotiate has improved’. The more optimistic tone between the two sides boosted risk markets on Wednesday. The US dollar continued its recent push higher, the Nasdaq posted a fresh nine-month high, while the S&P 500 nears levels last seen back in late August.

While the debt ceiling talks gave risk markets, in general, a push higher, Bitcoin was also helped by news yesterday that Tether, the largest asset-backed stablecoin, would invest up to 15% of its net profit into Bitcoin on a monthly basis. Tether recently announced a net profit of around $1.5 billion.

The cryptocurrency market joined the move higher with Bitcoin bouncing off support around $26, 600. The largest cryptocurrency by market cap is currently changing hands around the $27,400 level. While higher prices may be seen in the coming weeks, the latest move higher lacks conviction and remains vulnerable to a short-term sell-off. The previously mentioned support level around $26,600 needs to hold if BTC/USD is to push higher as there is little in the way of any technical support before $24,255 comes into view if selling persists. If the move higher continues, resistance from the 20- and 50-day moving averages, currently at $27, 957 and $28,446 respectively needs to be broken to allow a re-test of the recent $30,000 double-top.

Bitcoin (BTC/USD) Daily Price Chart – May 18, 2023

The Ethereum/Bitcoin chart is at an interesting spot with 0.06787 proving difficult to break while the 20- and 50-day moving averages are currently providing support around 0.06630. This narrow range is likely to break soon.

Ethereum/Bitcoin (ETH/BTC) Spread Daily Chart – May 18, 2023

Charts via TradingView

What is your view on Ethereum – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.